Guest Author: Where’s National’s ‘corporate welfare’ reform?

- Penny Bright

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“How many billion$ of public monies could be saved by ‘CUTTING OUT THE CONTRACTORS’?

Where’s National’s ‘corporate welfare’ reform?

Which of the major political parties are pushing for ‘corporate welfare’ reform and shrinking the long-term dependency of the private sector on our public monies?

Where is the ‘devilish detail’ at both local and central government level – which shows EXACTLY where our public rates and taxes are being spent on private sector consultants and contractors?

Why aren’t the names of the consultant(s)/ contrators(s) – the scope, term and value of these contracts, published in Council or central government Annual Reports – so this information on the spending of OUR public monies is available for public scrutiny?

Where are the publicly-available ‘Registers of Interests’ for those local government elected representatives, and staff responsible for property and procurement, in order to help guard against possible ‘conflicts of interest’ between those who ‘give’ the contracts and those who ‘get’ the contracts?

Where’s the ‘transparency’?

Given that New Zealand is ‘perceived’ to be the least corrupt country in the world – along with Denmark and Singapore, according to Transparency International’s 2010 ‘Corruption Perception Index – shouldn’t we arguably be the most transparent?

Going back a step – where are the New Zealand ‘cost-benefit’ analyses which prove that the old ‘Rogernomic$ mantra – public is bad – private (contracting) is good’ can be substantiated by FACTS and EVIDENCE?

At last – someone – somewhere has actually done some substantial research – which proves the opposite.

That ‘contracting out’ services that were once provided ‘in-house’ is actually TWICE as expensive.

“USA Project On Government Oversight (POGO)[1] decided to take on the task of doing what others have not—comparing total annual compensation for federal and private sector employees with federal contractor billing rates in order to determine whether the current costs of federal service contracting serves the public interest.

http://www.pogo.org/pogo-files/reports/contract-oversight/bad-business/co-gp-20110913.html
Executive Summary

Based on the current public debate regarding the salary comparisons of federal and private sector employees, the Project On Government Oversight (POGO)[1] decided to take on the task of doing what others have not—comparing total annual compensation for federal and private sector employees with federal contractor billing rates in order to determine whether the current costs of federal service contracting serves the public interest.

The current debate over pay differentials largely relies on the theory that the government pays private sector compensation rates when it outsources services. This report proves otherwise: in fact, it shows that the government actually pays service contractors at rates far exceeding the cost of employing federal employees to perform comparable functions.

POGO’s study analyzed the total compensation paid to federal and private sector employees, and annual billing rates for contractor employees across 35 occupational classifications covering over 550 service activities. Our findings were shocking—POGO estimates the government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services. Specifically, POGO’s study shows that the federal government approves service contract billing rates—deemed fair and reasonable—that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services. ”

The implications of this both nationally and internationally are HUGE.

If NZ central government figures are comparable with those of USA Federal Government – could the current NZ $82 billion central government spend be sliced in half by $40 billion ‘CUTTING OUT THE CONTRACTORS’?

http://www.treasury.govt.nz/budget/2011/estimates/est11sumtab.pdf
Which political parties / candidates are focussing on the SPENDING of public monies, rather than debt and borrowing?

If central and local govt departments /SOEs / CCOs / Crown Research Institutes are all defined as ‘PUBLIC- BENEFIT ENTITIES’ as defined under NZ Equivalents to International Financial Reporting Standards (“NZ IFRS”) – then their primary objective is to provide services and facilities for the community as a social benefit rather than make a financial return.

So – how come so many services that USED to be provided ‘in-house’ are now contracted out to the private sector – whose primary objective is most certainly to ‘make a financial return’?

What magic is this that transforms public (ratepayer and taxpayer) monies into private profit?

WHERE IS THE NZ EQUIVALENT OF ‘POGO’ the USA ‘Project On Government Oversight ‘ which has just completed first-ever research which proves that private contractors cost twice as much as ‘in-house’ providers of Federal Government services?

HOW MUCH MONEY could be saved in NZ at central and local government by cutting out all the private ‘piggies in the middle’ with their greedy snouts in our public troughs?

Why aren’t the statutory ‘third party’ Public Watchdogs, as well as other major political parties demanding this accountability?

How much public money at central and local government level could be saved by ‘CUTTING OUT THE CONTRACTORS’?

Who else is even asking this question?

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Additional

Govt depts clock up $1bn in consultant fees

Government’s spending on consultants skyrockets

PM’s ‘special’ movie studio meeting

Government denies MediaWorks loan

Emitters get ‘$1.4b corporate welfare’

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